Oberman wants review of licensing `ripoffs` Ald. Martin...

March 17, 1985|By Linnet Myers.

Oberman wants review of licensing `ripoffs` Ald. Martin Oberman (43d) said Saturday he will urge the City Council to review licensing agreements that he called ``taxpayer ripoffs`` and which he said are cheating the city out of millions of dollars.

Oberman said licenses held by three fiber-optics companies for use of the city`s downtown underground railway tunnels were granted at ``bargain basement prices`` to firms that will make millions of dollars from them.

He said he also will challenge the city`s renewal of the O`Hare International Airport concession franchise to Elson`s of Illinois Inc., which runs a multimillion-dollar newsstand business.

Elson`s recently granted a 20 percent interest in its business to Atlanta attorney David Franklin, who is black, for $100, so that the company could meet city minority ownership requirements.

``If Elson`s can afford to give away 20 percent of its business to get the O`Hare franchise, then the city is obviously undercharging,`` Oberman said.

The firm, which holds a monopoly on newsstands at O`Hare, last year grossed about $7 million, according to city officials. The city expects that income to reach $20 million a year in the next five years, because the number of newsstands will go from three to nine with the airport`s expansion.

Three telecommunications firms are licensed to install fiber-optic cables, which transmit computer data, in abandoned tunnels that were once used to deliver coal.

A confidential document from a consultant for one of the companies, Chicago Fiber Optic Corp., estimated that the company will make $35 million in the first three years of operation.

Yet the firm is paying ``a mere $17,000`` annually for its license, as are two other companies, MCI and GTE Sprint, Oberman said.

``O`Hare Airport and the underground railways don`t belong to the bureaucrats or the politicians,`` Oberman said. ``They belong to the taxpayers of Chicago.

``The people of Chicago are stockholders in this city corportation. And they`re no doubt asking themselves: `Is this any way to run a business?` ``

Oberman said he will outline resolutions at a Sunday press conference outside City Hall. He said that on Wednesday he will introduce to the city council a resolution asking the Finance Committee to re-examine the agreements, a second resolution proposing standards to ensure that no city property rights are leased at less than fair market value, and a third proposing guidelines to make sure that firms have legitimate minority representation.